Dhaka: Bangladesh Bank (BB) has published the draft ‘Payment System Operator (PSO) Regulation 2025’, a move aimed at integrating the regulation with the existing Payment and Settlement Systems Act, 2024. The central bank has recently sought public feedback on the draft regulation and plans to finalize it after consulting with stakeholders.
According to Bangladesh Sangbad Sangstha, the draft mandates that every PSO maintains a sufficient balance in its Trust and Settlement Account (TSA) at the end of each business day to cover all outstanding merchant liabilities. A shortfall in the TSA will result in a penalty, determined as the lesser of Tk 30 lakh or the prevailing Standing Lending Facility (SLF) rate, currently at 11.50 percent. Directors, CEOs, and treasury officers will be held personally accountable for any TSA shortfall. If unresolved for more than 14 days, an extra fine of Tk 10,000 per day will be imposed.
PSOs, acting as intermediaries, facilitate payment channels for acquiring, processing, clearing payment instructions, and settling obligations. However, they are not allowed to issue e-money, and all settlements must occur through scheduled commercial banks. Authorized PSO services presently include merchant acquiring, ATM acquiring, and payment switching. Prominent PSOs in Bangladesh include SSLCOMMERZ Ltd, shurjoPay, IT Consultants Ltd, aamarPay, and PayStation.
To obtain a PSO license, a company must be incorporated under the Companies Act 1994, with payment services explicitly mentioned in its Memorandum of Association. The licensing process involves two stages: obtaining a No Objection Certificate (NOC) and then the main license. The application fee is Tk 50,000, while the license fee is Tk 5 lakh. A licensed PSO must commence operations within 120 days, as stated in the draft.
Minimum capital requirements vary by service type, with Tk 1 crore for digital merchant acquiring and up to Tk 20 crore for ATM/CRM services. Additionally, PSOs must maintain ongoing capital equivalent to 0.3% of their average monthly transaction volume (over the past 12 months) for merchant acquiring and payment initiation, and 0.1% for switching, ATM, and card scheme services.
The draft also outlines that each PSO must have a board of at least five members, two-thirds of whom must be non-executive directors. The chairman must also be a non-executive member. Board members must have a minimum of five years of professional experience and meet integrity standards. Directors cannot be loan defaulters or hold positions in any other PSO simultaneously.
The CEO or managing director must have a graduate degree and five years of experience in finance, payments, fintech, IT, or telecom, including at least two years in a senior leadership role. Appointment of a CEO requires prior approval from Bangladesh Bank, along with a background check, educational verification, and CIB report.
PSOs are required to complete KYC verification for all merchants, maintain written settlement agreements, and ensure that sales proceeds are settled within five working days. Cash settlement is strictly prohibited. ATM and CRM outlets must be located in secure and accessible areas, with downtime not exceeding 12 hours in urban areas or 24 hours in rural areas without prior approval. A central monitoring system will be mandatory.
As per the draft, each PSO must establish a comprehensive risk management framework covering liquidity, operational, custody, fraud, and money laundering risks. Boards will define risk appetite and strategy, while senior management will oversee implementation, monitoring, and stress testing. Sponsor shareholders will be prohibited from transferring shares within five years without central bank approval. PSOs will be subject to both off-site and on-site inspections by Bangladesh Bank.
Any customer charges will require prior approval from the central bank, and all transaction data must be preserved for at least 12 years. In case of a major operational incident, PSOs must report it within 24 hours, and any data breach must be reported within 72 hours.